Commercial or residential?

Now, back to the question. Do we buy commercial or residential property?

I suggest you start with residential as the numbers tend to be smaller. Other than that, the returns on commercial property tend to be somewhat better but it is more difficult to get a bond (usually requiring a 30% deposit, compared to from 20% to zero).

Be careful when letting residential property. If your tenant(s) include aged or infirm people or young babies, you will find it much more difficult to obtain an eviction order. Now, of course the young baby bit can be a problem as you can hardly control the family planning of your tenants! At least be aware of the problem when screening your prospective tenants. By the time a new baby comes along, things will probably have settled down anyway.


We call that settling down period the bedding in of the new property. If you're going to have problems, they will mostly arise when you first buy. After that, you'll just have the usual problem of collecting rent and maintaining the property.


Should you wish to make an appointment, please feel free to visit Derek's diaryand book a time that suits you.


South African Institute of Chartered Accountants. Designation CA(SA)  Internationally Accredited Financial MediatorsIndependent Regulatory Board for Auditors. Designation RA<Engineering Council of South Africa. Designation Pr(Eng) Member of MENSA, the High IQ Society




Find Us Here

Address: 1st floor, Gallagher School Building, 537 Lupton Drive, Midrand, Gauteng